The presentation covers the process of supplier selection process of pharmaceutical company Merk located in Pakistan. Its KPIs are also discussed.

2. Topics
•Introduction of Merck
•Merck in Pakistan.
•Segmentation and Products.
•Our topic “ Supplier selection”.
•Merck suppliers.
•Supplier Selection Process.
•Costing.
•Problems in the process.
•KPI & Value added projects.
•Recent initiatives.

3. INTRODUCTION OF MERCK
Merck is the world’s oldest chemical and pharmaceutical company
(1668), started by Jacob Merck with Angel Pharmacy.
Emanuel Merck, who took over the pharmacy in 1816, made the first
step from a pharmacy to a global company. He initiated the move to
industrial-scale production.
Emanuel Merck, who took over the pharmacy in 1816, made the first
step in 1904, Merck was already selling Liquid Crystals for scientific
research, but it was not until the end of the 1960s that intensive
research resumed on Liquid Crystals for practical application.

4. MERCK IN PAKISTAN
• MERCK has been present in Pakistan for more than 50 years with approximately 1,200
employees, generated sales over Rs. 6.5 billion in the present era. It comprises of two subsidiaries, these
are ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, ISO 27001:2005, ISO 20000: 2005, CGMP
certified and present at two major locations:
• The Head Office is based in Karachi, raw material warehouse
and manufacturing facility are at Quetta.
• Annual production for solids is 1.6 billion tablets with an
increasing trend; liquids – 19 million litres; and injectables –
80 million ampoules.
Merck (Pvt.)
Ltd
• This part of business produces soft gelatine capsules in
Karachi at Site area.
• It specializes in making multivitamins. The approximate
annual production is 500 million capsules.
Merck
Pharmaceuticals
(Pvt.) Ltd

5. MERCK’S SEGMENTATION OF
BUSINESS
Gynae &
Fertility
Gastrointestinal
Care
Neuro Care &
Oncology
Diabetes & Cardio

6. MERCK PRODUCTS
Merck has segmented their business in different business unit
Diabetes & Cardio
• Dealing in the therapeutic segments of diabetes, cardiovascular
disorder and central nervous system
Gynae & Fertility
• Offers a diverse product portfolio in general medicine, female
health care and fertility.
Neuro Care & Oncology
• Deals with products used in the management of nervous system
disorder (e.g. neurodegenerative diseases, epilepsy etc),
metabolic disorders (diabetes), gastrointestinal disorders
(gastric ulceration), painful inflammatory conditions of bones,
muscles etc and CANCER.
Gastrointestinal Care
• This business unit offers a diversified product mix for functional
GI disorder.
Vitamin Profile
• Its vitamin profile offers B-complex with zinc supplement which
is available in oral and injectable form. It also offers a range of
cough syrups for the treatment of dry and productive cough.

7. What is Supplier Selection?
• Supplier selection is the process by which firms identify, evaluate, and contract with
suppliers.
• The supplier selection process deploys a tremendous amount of a firm’s financial
resources.
• In return, firms expect significant benefits from contracting with suppliers offering high
value.
• Supplier selection criteria for a particular product or service category should be defined
by a “cross-functional” team of representatives from different sectors of your
organization. In a manufacturing company, for example, members of the team typically
would include representatives from purchasing, quality, engineering and production.
Team members should include personnel with technical/applications knowledge of the
product or service to be purchased, as well as members of the department that uses the
purchased item.

8. Merck’s Suppliers
and
Supplier Selection Process
2 Sources
Out of Pakistan In Pakistan
•INDIA : raw material
•CHINA: raw material
•GERMANY: raw material
•TAIWAN: packaging material.
•SINGAPORE: packaging material
Supplier for the packaging
material like cartons packaging
etc.
M/s Techno Ampules,
M/s Spotlit printer

9. Merck’s Suppliers
• The Merck import all it main raw materials
like (salts, active pharma ingredients,
excipients) from China, India & Germany.
• Merck also import packaging material like PVC
,PVDC film and other coating materials from
Taiwan and Singapore.
• Merck only use the packaging materials like
cartons, shipment boxes etc from Pakistan.

10. Supplier selection Process
For Existing
Supplier
Requisition
Form
Approval by
Concern
Department
Comes in
Procurement
Department
Issuance Of
Purchase Order
Mode of
Payment
CERTIFICATE OF
ANALYSIS AS
PER
SPECIFICATION
QUALITY
ASSURANCE
DEPARTMENTPURCHASING
For New
Supplier
And New
Material
Requisition
Form
Approval by
Concern
Department
Comes in
Procurement
Department
Found the
Supplier and
Identify its
customer
Send the Q.A
Team For the
Evaluation
(audit)
Sample
testing &
CERTIFICATE
OF ANALYSIS
NAME IN
APPROVED
VENDOR LIST
QUALITY
ASSURANCE
DEPARTMENT
&
PURCHASING
E-BIDDING THROUGH MERCK PORTAL The selection of the supplier is also done through E-Bidding. In this
process, Merck provides an online platform to their suppliers, called Merck Portal, through which the
suppliers can bid their prices. The identity of each bidder is hidden and they are assigned with their
respective codes. All the bidders can see the biddings of prices from other bidders as well. The minimum
bidder gets the Purchase Order after fulfilling all the required specification.

11. COSTING
COSTING IN
MERCK IS
USUALLY OF
TWO
TYTPES
RATE COST
(At Seller’s
premises)
LANDED
COSTING
(At Buyer’s
premises)

12. EXPLAINATION OF COSTING
• Rate costing:
The 1st method of costing is that the supplier will not bear
the cost of any expense, & the buyer has to bear all the
cost including all the charges.
• Landed costing:
In this method will deliver the goods to the buyer’s identified
premises and bear all the cost ( taxes, duties etc)
During the whole process of costing the quality
of the product or material is considered as
the most important thing & the main focus is
on the quality not on cost.

13. Problems In The Process
• The stability issue of the material:
( material consistency, Quality when put in to
production).
• Import Problem & Shipment Problem:
( Arrival of shipment in distant countries such as
in Dubai at Jibl–e-Ali port).

14. KPI, Value Added Project
KPI- Key Performance Indicator
• Reduce 10% cost over last year in totality.
• Follow the OTIF .
• Supplier Selection
Value added project
• JIT theory apply in bulky local items.
• Supplier development.
• Improvising on ongoing Projects
• Reduction of PVC/PVDC size by 4mm
• Elimination of coating material
• Reduction of set up time in blister machine

15. Recent Initiative
• FOCUS ON JIT .
• COMMUNICATION WITH ALL THE CONSERNED
DEPARTMENTS .
• CUSTOMER SERVICE.

16. CONCLUSION
After Survey the MERCK Private Limited, we have concluded
that; in order to be effective and efficient in performing
operations, the organizations must focus on effective
production, long-term relations with the suppliers by
sharing relevant / required information and provide
better product to its customers to achieve customer’s
maximum satisfaction.
The more better the relation with supplier, the more
earnings a company can deprive by satisfying their
customers.
That’s all we have to share
Thank You